The Petroleum and Natural Gas Regulatory Board’s (PNGRB) move to end the dominance of city gas companies like Indraprastha Gas and Mahanagar Gas in their respective markets and make all such entities come under a network of ‘common carrier’ is still facing ‘resistance’ from these companies, a member of the board told FE. However, the board is firm on the common carrier principle (CCP) and plans to work on it for its smooth implementation, he said.
“Currently, there is a resistance from entities but we are coming out with ways and telling them that they have to do this,” the member said. “Whoever has the monopoly does not wish to end it. But we have to see the consumers’ point of view. Ultimately, the end consumer will have the choice and they should be benefited.”
The city gas distribution companies have for long been showing angst against the regulation as it will impact their share in their own respective major markets, forcing them to reserve a part of their pipeline capacity for a third party.
When the PNGRB first unveiled CCP in 2003, cross-country pipelines were exempted and some leeway was given to gas producers like Reliance to own and operate pipelines up to a certain distance from the production sites without having to face competition. Trunk pipelines for transportation of gas across the country for long distances are, however, being largely shifted to CCP regime.
However, the regulator is making efforts to ensure that in the distribution segment which is closer to end consumers too, the principle is implemented. Litigation is impending the move.
State-run GAIL India, which owns the largest gas transmission network in the country with nearly 75% share, has laid down the Natural Gas Pipeline Open Access System to apply for booking of its capacity on common carrier/contract basis.
A common carrier system implies that capacity in a natural gas pipeline, over and above the pipeline entity’s own requirement and capacity allocated on a contract carrier basis, will be made available to any other entity on a non-discriminatory “first-come-first served” basis, subject to the latter entering into a contract with the network owner.
On declaration of a CGD network as common carrier, the authorised entity is subjected to provide access on demand to any other entity and recover the transportation rates for CGD from an entity accessing the CGD network, according to the Board’s official notification.
Further, the relevant notification said that the CGD companies should provide access or connectivity of their infrastructure to any other interested third party within 270 days of submission of request for the same at a reasonable cost.
“We have to generate a kind of environment for consumers that they have the option, but the realisation of the same takes time,” the member said. “Currently, it has started happening in Delhi and Mumbai and consumers are being benefitted.”
CGD companies have earlier argued that any infringement on the infrastructure is not appropriate and will harm their interests who have been spending huge amounts on creating it.
Further, talking about the implementation of One Nation One Gas Grid, the member said that people have started using it and so far the Board has not received any complaints. “Initial first year we have given a period where we are seeing if any major problem is there,” the member said. “So, after one year we will see if any tweaking is required to be done.”
PNGRB’s aim with One Nation One Gas Grid was to join several regional grids and create a national grid that will supply natural gas-produced energy to multiple stakeholders including the public and the commercial sector.
IGL’s current PNG (piped natural gas) penetration is around 40% in Delhi and is expected to grow to 60-65% in the next 4-5 years, the member said. MGL’s PNG penetration is at 30-35%.